With the Dec. 23 deadline looming for signing up for health insurance under Obamacare, consumers rushing to purchase new coverage may be in for a rude shock if they focus principally on finding the least expensive premiums, according to experts.
That’s because many people buying coverage on the federal exchanges either to replace old policies or to obtain coverage for the first time could get hit with deductibles and other out-of-pocket costs much higher than is typical in employer-sponsored health plans.
Perhaps more importantly, they may find themselves excluded from some of the best hospitals in the country and their affiliated doctors.
Deductible Sticker Shock
Gail Wilensky, a senior fellow for Project HOPE and the Medicare director for the first Bush Administration, said on Monday that consumers should be as mindful of deductibles and the hospitals and doctors in network as the monthly premium costs in shopping around.
“What you’re buying is not just the benefits specified in the law but whom you will have access to in getting the service delivered,” she said in an interview. Many of the policies being offered on the federal and state exchanges carry annual deductibles that often top $5,000 for an individual and $10,000 for a couple, according to The New York Times.
“Right now, most of the focus has been on the cost of the monthly premium and occasionally people have remembered to . . .look at what the deductible and the co-insurance is, because that is as important as the premium,” she added. “Whether a hospital is in or out of network is really the third piece: don’t forget to look at what you’re buying.”
Like most insurance policies, the lower the premium the higher the deductible. For example, in El Paso, Tex., for a couple both age 35, one of the cheapest plans on the federal exchange, offered by Blue Cross and Blue Shield, has a premium of less than $300 a month but an annual deductible of more than $12,000, according to the Times. In the case of a 45-year-old couple purchasing insurance on the federal exchange in Saginaw, Mich., a policy with a premium of $515 a month carries a deductible of $10,000 a year.
Some of the Best Hospitals Are Off Limits
Americans purchasing health insurance on the federal and state exchanges may be in for an even bigger shock when they discover some of the best hospitals in the country out of reach, even when those hospitals were previously available to them under their personal policies. That’s because most of the top hospitals in the country will accept insurance from only one or two companies operating under Obamacare.
Obamacare regulations and government subsidies are likely to make insurance more affordable for millions of Americans, as President Obama and senior aides have repeatedly boasted. But many insurers have responded to Obamacare caps on premiums by offering top-tier hospitals and physicians far less money for services rendered. And they’re responding by strictly limiting the number of policies they will accept.
Watchdog.org recently looked at the top 18 hospitals nationwide as ranked by U.S. News and World Report for 2013-2014 – contacting each hospital to determine their contracts and policies. The government watchdog group found that many of the best hospitals in the country were simply opting out of Obamacare – much to the detriment of people in search of the best or most specialized health care.
Both Ohio and California have a dozen insurance companies on their exchanges, yet two of the states’ premier hospitals — Cleveland Clinic and Cedars-Sinai Medical Center — have only one company in their respective networks.
A few, such as top rated Johns Hopkins in Baltimore, are mandated under state law to accept all insurance companies. Other than that, the hospital with the largest number of insurance companies is University Hospitals Case Medical Center in Cleveland with just four. Fully 11 of the 18 hospitals had just one or two carriers, according to Watchdog.org.
Amid a drive by insurers to limit costs, the majority of insurance plans being sold on the new health care exchanges in New York, Texas and California will not offer patients access to Memorial Sloan Kettering in New York City or MD Anderson Cancer Center in Houston, two top cancer centers, according to the Financial Times.
“We shouldn’t be surprised by this,” Wilensky said. “There was a lot of pressure that exchanges placed on insurance plans to keep premiums low, and the benefits are specified in law for each of the four levels of health care plans. If the benefits are specified and the premiums are pressed low – sometimes lower than the insurance companies thought was appropriate, a major way to try to accommodate that financial pressure is to limit the number of physicians and hospitals.”
“And by limiting the number of physicians and hospitals, you may get those that you include to accept a lower reimbursement,” she added.
Consumers have until Dec. 23 to enroll in new health insurance under Obamacare to qualify for coverage beginning Jan. 1. However, open enrollment will continue through the end of March.
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